We keep hearing Amazon can’t make a profit. I heard that Barnes and Noble on line, as a business unit, did. What about say CD Now? What are the big success stories? Why is AOL still growing when anyone can sign up for less money?
AOL is still growing because the percentage of people who want to be on the internet that are non-technical people is much greater than the number of technical people. AOL is extremely easy and intuitive to setup and run when a standard internet connection is more complex (for those without the technical background).
-Dragwyr
“If God had meant for man to eat waffles,
he would have given him lips like snowshoes”
-Rev. Billy C. Wirtz
someone was going on about how steve case is so concerned about internet censorship and blah blah blah . . why do they keep dropping adult newsgroups . . i said look around in here; aol wants to be the martha stewart/disney channel/goodhousekeeping/
entertainment tonight place for all american people of wholesome virtue. damn . . sure enough . . look whats happening . . your right its easy to use . . brings content to a lot of the simpleminds out there.
One reason AOL keeps growing is because they mail everyone in the world their software every four months. And it says ‘FREE’ on it.
As for web sites that make money, that is what I would like to know. I know that business.com sold for around $4M but people forget they aren’t buying a name & that they probably spent far more than $4M designing the site.
So lets read about those net sites that actually make money, NO porno sites.
It seems amazon netted 125 mil last year. Don’t know what their costs were.
If you want to research any publicly traded company online or otherwise, here is a great link…
If you can’t convince them, confuse them.
Harry S. Truman
Edgar seems to require registering. Any more success stories?CD Now?
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- Well I had this little idea of mine. I was thinkin’ of, y’ know, showin girlie pictures onna computer for money. Do ya think people’d pay for that? - MC
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Amazon.com might make money if they stop losing everybody’s orders (mine included).
–It was recently discovered that research causes cancer in rats.
Look at their stock, you can see if they are making money, sort of.
MC is right. So far the biggest winners are the porn sites.
Cooper, I used to think so too, but then I found out how porn sites lie about how much they make. It’s not surprising anyway, considering the morality of the people who run them.
I just looked up Amazon.Com’s financials via quote.yahoo.com (look up stock ticker AMZN), and I’m afraid that they’re not only still losing money - their losses are getting larger.
According to quote.yahoo.com’s Financial Profile page on Amazon, “For the nine months ended 9/30/99, revenues rose from $357 million to $963.8 million. Net loss totalled $396.8 million, up from $78.1 million. Revenues reflect an increase in units sold due to growth of the customer base and repeat customers. Higher loss reflects a $175.3 million merger and acquisition related charge.”
Reading Amazon’s own 10-Q statement for 9/99 doesn’t make things much better, I’m afraid. In the “Additional Factors that mat affect Future Results” section of that document, Amazon notes that they’e run an acumulative deficit of $558.8 million so far and “we believe that we will continue to incur substantial operating losses for the foreseeable future, and these losses may be significantly higher than our current losses”.
And this is an Internet >>success<< story. Pretty scary.
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- I am not defending the content or practices of porn sites, but collectively the amounts they must pull in are likely huge. They commonly do hype everything they do, but it all costs money to put on the web and somebody is paying for it.
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- I do note that there was an issue of much concern among Western porn site operators some time back: with the opening of political conditions in eastern Europe, many porn sites began to originate from that region. The main reason suspected was that the available people (women) “look” American/European, but will usually work for considerably less than their international counterparts. For this to affect the business climate, the profit margin for any particular site would likely be quite small. - MC
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- At any rate, I doubt any porn site has lost 550 million dollars.
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- Many “top” net businesses seem to be sustaining themselves on the “It’s so big, it can’t fail!” myth - there’s a nickname for this but I forget what it is. And anyway, it’s wrong. As any institution gets larger, it gets more difficult to manage effectively and money just falls through cracks everywhere. In most instances if you can’t get a small business to run profitably, it’s even more unlikely you’ll get a large one to. Think Pan Am. - MC
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I find it interesting that no one cares any longer whether a stock pays dividends, or really whether a company makes money at all. I read that something like 25% of companies pay no dividends now, and most of them are hotly traded stocks that are highly valued. Twenty years ago, that number was 5% and represented those companies that could not pay dividends because they were not making money and were failing.
Any longer the stock market is a ridiculous house of cards, I can’t imagine that it will not topple at some point.
it does make one uneasy; all these internet stocks valued at millions yet they dont make a dime of profit or pay dividends. i guess were all just financing their speculation. its not like they have large physical assets like plants with equipment where they make a “product” that sells at a “store” that people “need”. i suppose this is sorta like the early 1900’s when people didnt really “need” telephones or automobiles, at this point we really dont “need” the internet to sustain our lives/society.
Forgive my ignorance, but how can a comp. like Amazon be worth $1B or so, but not make a profit?
The same thing seems to be happening with other internet stocks, they keep going up & up yet the comp’s don’t show any profits.
im sure someone else can answer this better . . remember stock value really is a reflection of confidence in a company, not so much what the physical assets(land,structures,eqipment,inventory) are worth. confidence is based upon history, objectives, planning, etc.
A lot of it is pure speculation. People buy the stock with the anticipation of being able to sell it later at a higher price. As long as internet stocks as a group continue to climb, this will feed on itself. But look out once one of the major players like Amazon goes bankrupt and crashes and burns. If people stop and have to start looking at the value in the companies they are holding - they won’t find any. Or not much, anyhow. A lot of these internet businesses have no physical assets, no distribution networks, no exclusive contracts, no customer loyalty, or anything else that is valuable once the shell of the company itself collapses.
Many of these internet companies are based on business models that are completely untested. Buy.com, for instance, was using its capitalization to sell products at below cost - their thinking was to build name recognition and a large customer base while the Internet is still young, and then capitalize on that as things mature. But is that realistic? That thinking might work for Sears, which gains an honest competitive advantage from having a huge network of stores, warehouses, etc. On the Internet, will Buy.com’s expensively-attained market share stay with them when they raise prices? Or will there be a mass exodus to companies with the cheapest prices, which is trivially easy to do on the net?
Handy,
The way that they arrive at the figure of a 1 bil. value for amazon is: amazon has issued 100,000,000 shares of stock. The price of amazon stock is $10.00 per share = Amazon is worth $1B. The numbers used here are not accurate for the example used, but you get the idea.
This is a true statement: by using this method, amazon, yahoo and several others are worth more than many big well known companies. The companies that i am referring to are ones like sears, whirlpool, international paper, and many biggies.